House of Fraser has found itself as the latest victim of a High Street downturn after confirming the closure of 31 stores together with the appointment of KPMG as nominees for proposed company voluntary arrangements (CVAs).
Admitting that the business is unviable in its present form the department chain was forced to take dramatic action in order to secure investment from Chinese conglomerate C.Banner, after it secured conditional agreement to acquire a 51% stake in the group with a pledge to inject much-needed funds.
The chain currently operates 59 leased stores across the UK and Ireland but over half of these have been deemed as unsustainable, leading to the painful decision to contract its estate to just 28 outlets by early 2019 in order to ensure its very survival.
Frank Slevin, chairman of House of Fraser, said: “Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business. So whilst closing stores is a very difficult decision, especially given the length of relationship House of Fraser has with all its locations, there should be no doubt that it is absolutely necessary if we are to continue to trade and be competitive.
“Our immediate focus is on our colleagues with whom we are communicating openly and supporting at this time.”
Consultations will continue through to 22 June whereupon a final decision will be taken on whether to put the plan into effect. Should it do so 2,000 members of staff and 4,000 partners could be affected by the changes.
House of Fraser is in process of finding a new ad agency having dropped incumbent 18 Feet & Rising.